PERES AND ARAFAT BEGIN SWISS TALKS

A potentially crucial meeting between the P.L.O. chairman, Yasir Arafat, and the Israeli Foreign Minister, Shimon Peres, began here on Saturday with both sides emphasizing that significant issues had to be resolved before they could reach an accord opening the way for a limited Israeli withdrawal from the Gaza Strip and the West Bank town of Jericho.

Elaborating on remarks made on Friday by an Israeli official, a senior Israeli delegate taking part in the talks said the Palestinians had already agreed that Israel would retain the ultimate authority to prevent unwanted individuals from entering Jericho and Gaza.

But the official, who spoke on condition of anonymity, said significant differences remained over the size of the district of Jericho being turned over to Palestinian self-rule and over security arrangements for Jewish settlements in the Gaza Strip and the West Bank.

On the issue of border checks, he said the Israelis had agreed to reduce their visibility considerably and allow Palestinian officials to process virtually all of their compatriots. That would eliminate the excruciatingly thorough searches that have been the rule for all Palestinians entering the occupied territories since Israel took the West Bank and Gaza in 1967. Almost No Searches Predicted

"Ninety-nine percent of the Palestinians coming into the territories from Jordan or Egypt will be admitted and processed without any searches," the official said. He said the Israeli compromise was in line with the spirit of Palestinian demands for a tangible improvement in the lot of Palestinians under occupation.

But the senior official said Israel would have to retain ultimate control of the entry points, through both electronic and physical monitoring.

"Once you cross the line from Jericho, you can go on to Tel Aviv," the official argued. "The issue is whether Israel has the option of searching some suspected person or suspected luggage, and the answer is yes."

The meeting broke up for the night at close to 2 A.M., with the Israeli Minister for Environmental Affairs, Yossi Sarid, describing the atmosphere as "very positive."

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Earlier, both Mr. Peres, who arrived in this Alpine resort on Friday, and Mr. Arafat, who flew in today by helicopter from Zurich, were more circumspect. Arriving at the luxurious hotel where he would negotiate with the Israelis, Mr. Arafat said only that he hoped an agreement could be reached. 'We Shall Try to Sign'

Walking amid mounds of freshly fallen snow, with Swiss security policemen and dogs guarding him, Mr. Peres told reporters after a meeting here with the Egyptian Foreign Minister, Amr Moussa: "We shall try to sign an agreement. But nobody can promise to do so ahead of time."

Under the guidelines of the accord on self-rule, the phased withdrawal of Israeli soldiers from the West Bank and Jericho was initially supposed to have begun on Dec. 13. But Israelis and the Palestinians have failed to come to agreement on details at several rounds of talks, holding up the withdrawal.

The latest set of negotiations with lower-ranking Palestinians and Israelis ended inconclusively in Cairo on Friday, prompting some diplomats to suggest that the April 13 target for completing the withdrawal was no longer realistic.

The involvement of both Mr. Arafat and Mr. Peres in this round is not viewed as a guarantee of success. The two men failed to resolve their differences in their previous face-to-face meeting last weekend in Oslo. They were in Oslo to attend the funeral of Johan Joergen Holst, the Norwegian Foreign Minister who brokered the secret talks that led to the agreement in principle signed in September in Washington to start negotiating a peace accord that would end the 45-year Israeli-Palestinian conflict.

Before leaving his headquarters in Tunis, Mr. Arafat told the United States Ambassador and a senior official in the British Foreign Office that the help of their governments would be needed to reach a deal. Washington has repeatedly expressed hope that the two sides will reach agreement soon, but it is not brokering the talks.

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A version of this article appears in print on January 30, 1994, on Page 1001007 of the National edition with the headline: PERES AND ARAFAT BEGIN SWISS TALKS. Order Reprints|Today's Paper|Subscribe